If you’re sitting on the sidelines watching Vanguard’s top growth ETFs hover near all-time highs, you’re not alone. But here’s the cold, hard truth – these funds are screaming buys for the long haul.
Time in the market crushes timing the market every time, and with rock-bottom fees and powerhouse holdings, there are a number of top Vanguard ETFs built to compound your wealth over decades. Here are three of my top picks among this group right now.
Vanguard Growth ETF (VUG)
One of my top picks in the world of Vanguard ETFs, the Vanguard Growth ETF (VUG) is a fund tracking the CRSP US Large Cap Growth Index. Investors looking for access to some of the best-performance high-octane large-cap names in the world of tech have what they are looking for, with 200 such top holdings in this sector.
Now, given the rally we’ve seen in tech broadly in the past few years, it should be no surprise that VUG is trading near all-time highs. I think a lot of this has to do with this fund’s expense ratio of just 0.04%, one of the best in the sector overall. Indeed, given the fund’s exposure to some of the absolute best companies in the world at such a low ratio, there’s a lot to like about the implied upside of the fund given its core portfolio holdings are centered around the Magnificent 7 tech giants.
With a mid-teens annualized return over the past decade, I think investors would be remiss to not take a look at this absolute behemoth in terms of assets under management. This is one fund I’m going to continue to monitor and provide updates on as they come.
Vanguard Russell 1000 Growth ETF (VONG)
The Vanguard Russell 1000 Growth ETF (VONG) is another similar option, this time aimed at investors looking to increase their small-cap exposure in the market.
There’s good reason for this, considering the long-term outperformance small and mid-caps provide relative to mega-caps. Now, given that we’re talking about the 1000 largest (mostly tech) companies in the world, investors in VONG still gain plenty of exposure to the mega-cap names most are looking for.
However, with a true blend of undervalued growth stocks at the smaller end of the market capitalization spectrum, this is an ETF I think can provide even more upside, if we do see a broadening out trade continue.
With roughly $40 billion in assets under management and a similarly-enticing 0.08% expense ratio, this is an ETF I think long-term investors in search of growth can sleep easy at night owning.
Vanguard Mid-Cap Growth ETF (VOT)
Finally, we have the Vanguard Mid-Cap Growth ETF (VOT). This exchange traded fund focuses more on the mid-cap end of the spectrum. In other words, a portfolio consisting of all three ETFs would cover the gamut well in terms of company size, and would be one of my preferred ways to generate meaningful growth over the long-term.
With 125 core holdings and tens of billions in assets under management as well, VOT is no slouch. That said, this is an ETF I’d probably put in the overlooked bucket. That’s one of the reasons why I like this fund, in addition to its minuscule 0.07% expense ratio.
With low-teens annual returns over the past decade, this is a fund that screams value for growth at a reasonable price hunters. In broad market expansions, such an ETF may outperform the other two. Thus, I think those looking to be truly diversified should probably take a look at all three ETFs, and come to a determination of which fits one’s individual risk tolerance level and long-term growth needs.
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